The Australian government has agreed to pay A$830 million (US$585.35 million) in a settlement with French arms manufacturer Naval Group over the administration of former Australian prime minister Scott Morrison’s controversial decision to scrap a submarine project.
Australian Prime Minister Anthony Albanese yesterday announced that the confidential settlement would draw a line under the canceled project.
Albanese’s party, at the time of the cancelation in opposition, gave support to the AUKUS security alliance between Australia, the UK and the US, which replaced the project and under which Washington and London have offered to help Canberra acquire at least eight nuclear-propelled submarines and cooperate on other advanced technologies.
Photo: AP
However, Albanese said that the way it was handled by his predecessor’s administration “has caused enormous tension in the relationship between Australia and France.”
“This is a fair and an equitable settlement which has been reached. It follows, as well, discussions that I’ve had with [French President Emmanuel] Macron, and I thank him for those discussions and the cordial way in which we are re-establishing a better relationship between Australia and France,” he said.
The agreement was forged by the new administration just three weeks after Albanese’s election victory.
It was not reached before the election by the former government and kept confidential, Albanese said.
The total cost of the failed submarine project for Australian taxpayers is A$3.4 billion, which is down from the A$5.5 billion announced as Canberra’s approved budget for the project.
Officials had considered this to be a maximum “envelope.”
Albanese said that despite the lower cost, it was still “an extraordinary waste from a government that was always big on announcement, but not good on delivery, and from a government that will be remembered as the most wasteful government in Australia’s history since federation.”
The prime minister said it would allow Australia to move forward in its relationship with France.
Macron accused Morrison of lying to him about the deal, and Morrison later said he was “not going to cop sledging of Australia.”
Part of a text message exchange between the two leaders was released to several Australian media outlets in an apparent attempt to blunt the idea that France had been completely blindsided by the cancelation.
French officials denounced the leaking as “an unprecedented new low.”
By contrast, Macron warmly welcomed Albanese’s election last month, extending an invitation for him to visit Paris, which Albanese said he had accepted.
“Details are being worked through. We have a critical relationship. France, of course, plays a critical role in the European Union, and President Macron, of course, has recently been re-elected. I am newly elected and it is important that we have engaged — I appreciated his message of congratulations and the fact that both of us want to reset the relationship between our two countries,” Albanese said. “I see a personal meeting between myself and President Macron in France as being absolutely vital to resetting that relationship, which is an important one for Australia’s national interests.”
On Thursday, the opposition leader Peter Dutton said he had devised a plan as defense minister in Morrison’s administration to buy two Virginia-class submarines by 2030 to fill the gap before the nuclear submarines are delivered.
He had “formed a judgement the Americans would have facilitated exactly that,” he said.
Albanese said that Dutton had presided over an “all-announcement, no-delivery” regime.
“You don’t defend your country and our national security with a media release — you defend it with operational capability,” he said.
“My government intends to concentrate on delivering rather than the statements that Peter Dutton has made that contradict all of the statements that he made while he was defense minister.”
As to whether Australia was negotiating for the submarines Dutton mentioned, Albanese said he would not be making “on the run comments” about national security and defense.
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